I wish to inform you that the Fiscal Year 2010–2011 budget has been finalized. Balancing the university's budget in a time of recession across the nation has been especially challenging. A summary rationale for resolving next year's budget is provided for your information. And, the task of addressing FY2011-2012 budget challenges is already underway.
As I noted in last fall's State of the University address, higher education—especially public higher education—is facing significant financial challenges as a result of the national recession. This issue is not unique to ÑÇÉ«Ó°¿â, nor to the Pennsylvania State System of Higher Education. It is at the forefront of concerns being faced by colleges and universities throughout the nation. As you may know, the state is facing a $1.3 billion shortfall for the current fiscal year. And, the state budget outlook for FY2010–2011 is not encouraging.
As we began our budget planning for 2010–2011, we projected enrollment of approximately 14,810, with projections of a budget imbalance of $8,611,519. Revenue projections totaled $180,194,296, with total spending projected at $188,805,815. The budget gap resulted from a number of factors several of which were beyond ÑÇÉ«Ó°¿â's control, including flat state appropriations (continuing at 2007–2008 levels plus the ARRA funds).
While working to meet the budget challenge faced by ÑÇÉ«Ó°¿â in the next academic year, maintaining the academic quality of this institution has been the highest priority. After many months of work and planning, engaging campus constituencies, we project a balanced budget for the 2010–2011 fiscal year through a combination of permanent and temporary budget reduction measures.
As personnel costs make up approximately 74% of our university budget, a significant part of our budget planning efforts continues to include careful and strategic workforce planning, including maintaining vacancies in positions due to attrition in many divisions and departments. The projected FY2010–2011 budget envisions no layoffs or furloughs of university employees at this time. A primary goal of the administration in its budget planning efforts throughout the 2009–2010 academic year has been to avoid laying off university personnel.
The financial outlook for FY2011–2012 is especially challenging. We anticipate that the 2011–2012 budget will warrant consideration of additional permanent budget reductions due in part to the loss of federal stimulus funding and projected flat state appropriations. The administration will be working to identify revenue generating initiatives and cost saving measures across all divisions and departments. Unfortunately, ÑÇÉ«Ó°¿â cannot rule out the possibility of retrenchment and furloughs for the 2011–2012 fiscal year.
While these difficult budget conditions are unprecedented in the history of ÑÇÉ«Ó°¿â, they are not insurmountable. During the summer months, there will be ongoing meetings of the University Budget Advisory Committee. I can assure you that the members of this group, as well as the executive team, will continue to pursue various cost containment measures and budget reduction strategies in order to mitigate any potential personnel reductions or layoffs.
As we work together to resolve our budget issues, I can assure you that preserving ÑÇÉ«Ó°¿â's academic core mission and the financial health and viability of the institution, will continue to be the utmost priority for our institution.